EURUSD—new lows

With the drop of the Euro to a new low this morning of 1.3060, it's very likely the bears will try to push it down to 1.30. The new low also negates the daily EW count I did last week and suggests that the Euro may finally be ready to drop to the projected 1.28/1.29 lows. 1.2885 is going to offer good support it it gets down there.

The question is, if you're not already short, can you get in to this move down. A look at the hourly chart, suggests it might find some support at 1.3040 and bounce a bit so one could short a rally from this level or short a break below this price. I took a small long position with a very tight stop at 1.3042. Believe me, I will be willing to stop and reverse. The hourly RSI is very oversold so it would seem reasonable to expext a bounce of some sort. There's also potitive divergence on the three-hour chart. If by chance it rallied back to the top of the range, 1.3320, one could happily short.

Support is 1.3040, 1.3000, 1.2885, and 1.2808. Resistance is at 1.3114, 1.3165, 1.3253, and 1.3320.

Here's the three-hour chart:











© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.